Semi/Early Retirement at a young age

uk1

Just "butting in" with a point you may or may not be aware of that helped us. It may or may not be a current opportunity - so you'd need to check.

We started and ran a company and were lucky enough to have an ex-Tax Inspector in our accountancy team and a few years before we retired he asked us whether we needed all of the cash we were taking out annualy in salary and dividends - and we didn't. We built up a sizeable cash bank balance for "future investment in people" but were then able to take virtually all of that cash largely tax free when we closed the business. Basically we had to show (if asked) that the cash was genuinely being saved for a specific project. We were never asked. It was a large balance. We retired effectively in our early 50's.

Others here can possibly provide opinion but this may be another stream for you.

Good luck with your well thought out and attractive plan.

atush

If you are now incorporated, then using the company to pay your pension provision each year could be very tax efficient.

C-dog

atush wrote: »

If you are now incorporated, then using the company to pay your pension provision each year could be very tax efficient.

Can you elaborate on this for me a little please atush? My plan is to fill the pension as usual but through the company. My wife is possibly joining an employee, so this could be a double whammy.

This does leave me in a very top heavy position in the pension department and not so much within accounts I can use in SR.

Though now I am considering leaving a lot of cash in the business for this precise reason...the "future investment in people".

My best laid plans are already thrown up in the air in a good way within 24 hours of posting this.

I think I might need to regroup and come back.

Hypothetically, if you were in my position earning for ease of calculations 100k, how would you structure your salary/dividend/ pension/retained capital for investment?

atush

How much is your pot worth today? There is a LA of 1.2M

If youa re incorporated into a LC, the compnay can pay your pension for you. So you'd not pay income tax on it, nor Nics, nor would the company pay Nics and it would be a business expense so would lover corporation tax.

If you are going to be close to your LA with pension, then S&S isas, Ects and Vcts will be where to save next.

Your OH will have a personal allowance, and if she is made an employee she can have a pension thru the company. As she will have a separate yearly and LT allowance.

C-dog

Thanks for all the advice. Makes a lot of sense. I've a bit of rejigging to do now and make some adjustments.

Oh and just to throw a spanner in my best laid plans, I'm to be a dad...

atush

Well then, you want to get your income down to 50K max, as then you(or the OH) get Child benefit for the baby. Invest it for them

CB should be int he name of whoever is least likely to work as that person get the credit towards state pension.

C-dog

It's kind of hit me like a train...

AlwaysLearnin

Congratulations!

mgdavid

C-dog wrote: »

............
Oh and just to throw a spanner in my best laid plans, I'm to be a dad...

That's a bit scary given my post #9 - I'm not psychic, honest :rotfl:

Congrats BTW :T

kindlefirebabe

Reading your thread with interest and just wanted to say congratulations. What this does demonstrate is that you have to be flexible with your plans lol?